Where it lives in the book
In the Georgia-NASCLA Contractors Guide to Business, Law and Project Management, 3rd Edition, the publisher describes Part 1 as business planning and start-up: writing a business plan, choosing a business structure, understanding licensing and insurance requirements, and basic management and marketing.
- Part 2 is operational fundamentals: estimating, contracts, scheduling, project management and safety. It is not where start-up topics sit.
- Part 3, administrative functions, is not where the publisher places business planning, structure, licensing or insurance.
The two net worth figures
The board rules in chapter 553-4 set a minimum net worth for each general contractor license:
- Unlimited general contractor: $150,000 (Rules 553-4-.01 and .02).
- Limited-tier general contractor: $25,000 (Rules 553-4-.05(3)(d) and .06(3)(d)).
The trap is swapping these with the insurance and contract figures. $500,000 is the general liability insurance minimum for general contractors, and $300,000 is the residential-basic insurance minimum. Neither is a net worth figure.
The limited-tier contract cap
Subsection (8) of Rules 553-4-.05 and .06 limits a limited-tier license to any contract of no more than $1,000,000. That cap is what makes the tier limited.
To find how far a contract runs over, subtract the cap, not some other figure. A $1,250,000 contract is $1,250,000 − $1,000,000 = $250,000 over the limit. Subtracting $25,000, $150,000 or $500,000 instead is the classic slip.
Whose net worth counts
When a qualifying agent applies for a company, Rule 553-4-.02 (and .06 for the limited tier) requires the agent to affirm that the business organization possesses the minimum net worth. The trap is counting the agent's or majority owner's personal net worth, alone or added to the company's. It never counts.
Work these from the company's figure alone:
- Company worth $110,000, seeking unlimited: needs $150,000 − $110,000 = $40,000 more. Clearing the $25,000 limited-tier bar does not make it qualify for unlimited.
- Company worth $90,000, agent personally worth $200,000: the company clears $25,000 but not $150,000, so it qualifies for the limited tier only.